ch 9 econ Quiz

Q: A price maker is a firm that:

can influence market price by adjusting its level of output.

Q: Marta takes her 72-year-old mother and her 11-year-old son to the local water park. Marta pays $12 for her ticket, $8 for her mother's senior citizen ticket, and $6 for her son's child ticket. This is an example of:

third-degree price discrimination.

Q: Which of the following statements is NOT true in determining the equilibrium price and output for a monopolist?

Monopolists select the price that is equal to average total cost.

Q: Which statement is NOT correct for a monopolist?

Because it takes the demand curve as given, a monopolist has no influence over price.

Q: All of the following are barriers to entry in an industry

a patent; governmental restrictions; economies of scale.

Q: Suppose a water utility compnay charges a residential customer $1.50 per 1,000 gallons for the first 30,000 gallons of water used, and $1.00 per 1,000 gallons for any amounts used in excess of 30,000 gallons of water. The water utility is practicing:

second-degree price discrimination

Q: When a business offers its customers bulk discounts, they are practicing:

second-degree price discrimination.

Q: Which of the following is a condition necessary for price discrimination

the product cannot be resold to another customer, the seller must have some market power, the price elasticities of demand are different for each group of consumers

Q: The Federal Trade Commission Act, as amended, prohibits:

unfair competitive practices and deceptive acts.

question

Because the market demand curve slopes down and to the right, for a monopolist marginal revenue will always

answer

be less than the market price

question

A monopolist sells 2,000 units for $20 each. Total costs of 2,000 units are $30,000. If the price falls to $19, the number of units sold increases to 2,100. Total costs of 2,100 units are $30,075. Total profits at the level of 2,000 units and a price of $20 is:

answer

10,000

question

An example of x-inefficiency is:

answer

an executive, at corporate expense, hiring a limousine to travel one block whenever it is raining.

question

A monopolist will shut down the firm when _________in the long run and _________in the short run:

answer

P<ATC, P< AVC

question

Assume that at a given level of output a monopoly firm has marginal revenue of $9, its ATC is $9, and marginal cost is $7. If this firm were to incrementally increase its output, then:

answer

profits will inc

question

A price maker is a firm that:

answer

can influence market price by adjusting its level of output.

question

Marta takes her 72-year-old mother and her 11-year-old son to the local water park. Marta pays $12 for her ticket, $8 for her mother's senior citizen ticket, and $6 for her son's child ticket. This is an example of:

answer

third-degree price discrimination.

question

If the public utility commission allows the water company to earn a normal profit, then it is enforcing a(n):

answer

average cost pricing rule

question

Which of the following statements is NOT true in determining the equilibrium price and output for a monopolist?

answer

Monopolists select the price that is equal to average total cost.

question

The demand curve for a monopolist is:

answer

the industry demand curve.

question

Which statement is NOT correct for a monopolist?

answer

Because it takes the demand curve as given, a monopolist has no influence over price.

question

All of the following are barriers to entry in an industry

answer

a patent;
governmental restrictions;
economies of scale.

question

Suppose a water utility compnay charges a residential customer $1.50 per 1,000 gallons for the first 30,000 gallons of water used, and $1.00 per 1,000 gallons for any amounts used in excess of 30,000 gallons of water. The water utility is practicing:

answer

second-degree price discrimination

question

When a business offers its customers bulk discounts, they are practicing:

answer

second-degree price discrimination.

question

Which of the following is a condition necessary for price discrimination

answer

the product cannot be resold to another customer, the seller must have some market power, the price elasticities of demand are different for each group of consumers

question

The Federal Trade Commission Act, as amended, prohibits:

answer

unfair competitive practices and deceptive acts.

question

______ is behavior where resources are expended to protect a monopoly position.

answer

rent seeking

question

_____ in an industry can be so large that demand will support only one firm.

answer

economies of scale

question

An unregulated natural monopolist would produce to the point at which:

answer

MR=MC

question

At movie theaters, lower prices are charged for matinees than for evening showings of the same film. The customers attending the matinees have:

answer

higher elasticities of demand than customers attending the evening showings.

1 of 20

question

Because the market demand curve slopes down and to the right, for a monopolist marginal revenue will always

answer

be less than the market price

question

answer

10,000

question

An example of x-inefficiency is:

answer

an executive, at corporate expense, hiring a limousine to travel one block whenever it is raining.

question

A monopolist will shut down the firm when _________in the long run and _________in the short run:

answer

P<ATC, P< AVC

question

Assume that at a given level of output a monopoly firm has marginal revenue of $9, its ATC is $9, and marginal cost is $7. If this firm were to incrementally increase its output, then:

answer

profits will inc

question

A price maker is a firm that:

answer

can influence market price by adjusting its level of output.

question

answer

third-degree price discrimination.

question

If the public utility commission allows the water company to earn a normal profit, then it is enforcing a(n):

answer

average cost pricing rule

question

Which of the following statements is NOT true in determining the equilibrium price and output for a monopolist?

answer

Monopolists select the price that is equal to average total cost.

question

The demand curve for a monopolist is:

answer

the industry demand curve.

question

Which statement is NOT correct for a monopolist?

answer

Because it takes the demand curve as given, a monopolist has no influence over price.

question

All of the following are barriers to entry in an industry

answer

a patent;
governmental restrictions;
economies of scale.

question

answer

second-degree price discrimination

question

When a business offers its customers bulk discounts, they are practicing:

answer

second-degree price discrimination.

question

Which of the following is a condition necessary for price discrimination

answer

the product cannot be resold to another customer, the seller must have some market power, the price elasticities of demand are different for each group of consumers

question

The Federal Trade Commission Act, as amended, prohibits:

answer

unfair competitive practices and deceptive acts.

question

______ is behavior where resources are expended to protect a monopoly position.

answer

rent seeking

question

_____ in an industry can be so large that demand will support only one firm.

answer

economies of scale

question

An unregulated natural monopolist would produce to the point at which:

answer

MR=MC

question

At movie theaters, lower prices are charged for matinees than for evening showings of the same film. The customers attending the matinees have:

answer

higher elasticities of demand than customers attending the evening showings.

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ch 9 econ Quiz

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